Maxtor exits NAS market

By Lisa Coleman

Citing poor revenue and competition with its own customers, Maxtor last week announced that it would exit the network-attached storage (NAS) market and concentrate on its disk drive business.

Maxtor entered the NAS market in 1999 when it purchased Creative Design Solutions (CDS) and re-launched CDS's products as the MaxAttach line.

This year, the NAS line represented about 1% of Maxtor's total revenue of about $4 billion.

In addition to the poor revenue performance, Maxtor was beginning to compete with its disk drive customers such as Dell, Hewlett-Packard, IBM, and Network Appliance.

"We were beginning to supply more and more drives, and subsystems, to other brands of NAS products, so the part of the business that was really growing for us was the OEM supply side," says Stephen DiFranco, vice president of corporate marketing for Maxtor.

"It's a struggle when you're competing against large vendors that can offer the same functionality and the same kind of platform as part of a larger brand umbrella," says Jamie Gruener, an analyst with The Yankee Group consulting and research firm.

Maxtor laid off about 150 of the 250 employees who worked on the MaxAttach brand.

The company will continue to support MaxAttach users, as well as customers such as Network Appliance. (Maxtor supplies drives and subassemblies to NetApp.)

The MaxAttach NAS appliances were based on Microsoft's Windows-based Server Appliance Kit (SAK).

Early next month, Maxtor plans to announce its disk drive technology road map with specific emphasis on consumer storage products and new enterprise drives.

This article was originally published on August 21, 2002